Markel Corporation took a double hit in its financial results, revealing losses in both the quarter and the nine months ended September 30.
In the third quarter of 2022, Markel recorded an overall loss to shareholders of $367.4 million. During the same period last year, the company benefited from a comprehensive shareholder return worth $80.2 million. In 9M, meanwhile, this year’s overall loss to shareholders was $2.2 billion. The corresponding figure in 2021 was an overall shareholder result of $1.3 billion.
“The overall loss to shareholders in 2022, for both the quarter and the nine months, was the result of net losses on investments and unrealized losses on our fixed-term portfolio,” Markel explained. “We typically hold our fixed-maturity investments to maturity and generally expect these losses to reverse over time.”
Net investment losses in Q3 and 9M were $281.5 million and $2.2 billion, respectively.
Lifting the lid on the numbers, Markel said: “Net investment losses in 2022 reflected a substantial decline in the fair value of our equity portfolio resulting from significant declines in public equity markets. Substantially all of our net investment losses in 2022 were unrealized.
“We hold our investments for longer periods, where investment returns generally reflect less volatility than quarterly and annual results.”
Meanwhile, co-chief executives Thomas S. Gayner and Richard R. Whitt say the numbers don’t accurately reflect the company’s performance.
They said in a joint statement: “Generally accepted accounting principles require that we include unrealized gains and losses on equity securities in net income. Given the breadth of our equity portfolio, we believe this approach creates revenue and net income volatility that may obscure the strong operating performance of our business and is inconsistent with our long-term investment philosophy. .
“Our long-term investment performance is best reflected in the cumulative unrealized gains of $3.9 billion in the fair value of our equity portfolio as of September 30, 2022.”